Blog RSS

The Pin Factory Blog

"Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice" - Adam Smith

Just how out of touch are MPs?

Written by Tim Worstall | Monday 04 February 2008

There's something of a tradition in American politics of tripping up politicians by asking them how much milk costs, or a loaf of bread. When their answer is out by 100 percent or more they can thus be portrayed as hopelessly out of touch, pampered inside their bubble of privilege and thus not worthy to rule.

At the risk of being yet another person to pile in upon Derek Conway, might I point you to this report?

He (Conway) also complained that MPs are paid “less than the sous-chef at the Commons” and said their salaries should be raised to £100,000 a year from £60,675.

Now as someone who has worked in the catering trade I would be extraordinarily surprised if the sous-chef at the Commons was paid more than £60,675 a year. In fact, as someone whose brother had to move to Kabul to make £50,000 a year as a Head Chef (there is, as you might not be surprised to find out, a certain amount of a danger allowance in that) I'd be absolutely flabberghasted to find out that salaries were so high. Unfortunately, the Common's catering side appears to have no job vacancies at present so I can't check their offers, although the general conditions do look good.

A senior sous-chef at a tony sorta place makes some £30,000 in London. Or a little further down the (ahem) food chain, £25,000. Or £26,000. Or £22,000-£25,000. Or £20,000 to £22,000.

I fear that the Honourable Member for Old Bexley and Sidcup is going to have something of a rude awakening when he rejoins the real economy immediately after the next election. Something of a pity of course that he wasn't more informed about conditions in that real economy while he was still likely to remain in Parliament.

View comments

Common Error No. 25

Written by Dr Madsen Pirie | Monday 04 February 2008

25. "Proportional representation is fairer than our present electoral system which can give power to minorities."

commons.jpgThe argument for proportional representation is that it represents parties in the legislature in proportion to their support in the country, whereas a first-past-the-post system tends to squeeze out smaller parties and often results in a government which has less than 50 percent of popular support.

After listening to the theoretical arguments for proportional representation, look at the practical experience of it. It is under PR that minorities often achieve disproportionate power. PR tends to deny overall majorities, and to promote representation by smaller parties. Coalitions are the norm, with very small parties bargaining for their demands in return for support.

Proportional representation thus brings in the politics of what used to be called the smoke-filled room, of the deals struck in private between the political bosses. The first-past-the-post system may often bring to power parties with less than 50 percent of the popular vote. What it does not do is to give excessive power to very small parties. One has only to look at the disproportionate influence of the extreme orthodox parties in Israel. With only 2 or 3 seats they have exercised a major influence because their votes were needed to build coalitions. It's possible to have a 10 percent shift in opinion in Scandinavia, and see only some junior agriculture minister swapped for someone from another party.

A democracy should enable people to change their government. It is more about throwing out who they don't want than about electing the most popular. Proportional representation makes change difficult. Elections tend to bring small adjustments in the balance between the parties, and to result in coalitions of slightly different composition. There are times when a break from the status quo is needed. It happened in Britain in 1945 and in 1979, but it is doubtful that either would have happened under proportional representation.

View comments

A party for libertarians

Written by Steve Bettison | Monday 04 February 2008

libertarian_snake.jpgAnd not a party in the traditional sense, but in the political. A recent addition to the political landscape (and to some extent a welcome one) is the UK Libertarian Party. It's so newborn that there’s little in the way of policy on their website, but we should be able to safely assume that it will be based on the idea of self-ownership and limited government, and most importantly: freedom! But does the creation of this party mean that the libertarians are moving towards becoming part of the establishment? Or is the establishment becoming more liberal, so that now is the correct time to expose the libertarian ideas to the public on a wider basis?

The most recent exploration of this theme came from the Libertarian Alliance, who've long been at the forefront of libertarianism in Britain. They recently asked the question in the inaugural Chris R. Tame Memorial Prize, "Does Britain need a Libertarian Party?" The winning entry can be read here and the author's answer is that there is no current need for a libertarian party. The author abhors the idea of libertarians becoming involved in the state machinery and argues that rather than squander time becoming part of the problem, libertarians should concentrate their efforts on spreading the ideas of liberty.

The arrival of Nick Clegg and David Cameron to the leadership positions of their respective parties has seen a sprouting of liberal (in its original meaning) ideas, albeit ones still couched in the language of the state. Perhaps a libertarian party can push them towards removing the state from people's everyday lives. It remains to be seen what can be achieved with a libertarian party, since as with any party it will be a mixture of all the creeds of libertarian thought. The problem is assembling policy that is truly libertarian, yet appealing to all within and without.

The surest way to make the state smaller is to explain and champion individual freedom and win the hearts and minds of the many. Hopefully a libertarian party will be able to help in that.

View comments

Quote of the day

Written by Wordsmith | Monday 04 February 2008

The difference between death and taxes is, death doesn't get worse every time Congress meets.

– Will Rogers

View comments

Blog Review 496

Written by Netsmith | Sunday 03 February 2008

An interesting point : that £73 billion cost of decommissioning the extant nuclear plants: more than half is from Calder Hall. Not only is that a sunk cost (and thus makes no difference to decisions about the future) it's also something that we're never going to build again. So, again, not something that should weigh upon decisions about future actions.

On the energy front, putting Exxon's profits in perspective. The tax collected upon them is equal to the income tax from an entire 50% of the US population.

Not a bad little political and blogging manifesto from Guido. 

Yet another reason to free schools from centralised control: when they were so free silly pedagogical methods could not be imposed from the centre. 

After the purely local matters, a very interesting idea posited: the US railways are run mainly for freight, the European ones mainly for people. Who has the matter the right way around? 

Indeed, we are truly in an age of unparalleled plenty when people use their leisure time to build leisure saving devices. 

And finally, the campaign against cheap chickens has increased the sales of cheap chickens and while it took a few years, Fraser gets the joke


View comments

Trying to understand

Written by Tim Worstall | Sunday 03 February 2008

I have to admit that I'm having trouble understanding the Naomi Klein phenomenon. The part I do understand is her fame as the author of a book called No Logo, which turned her into a global brand name for those complaining about global brands. Fame, yes, but I am suprised to find out that it's not as a disproof of the contention that only the British do irony. Looking at what she actually writes confuses me further:

Even in the wealthy United States, most people earn less than the average income.

We'll assume, in kindness, that she means the mean average (for of course the definition of the median is that 50% minus one person does indeed earn more), but even then it's a very strange statement, one to which the answer is, of course! Income is bounded at the bottom at zero (while it is possible to have a negative income in a year, as I know, we don't actually count incomes in that manner) and not bounded on the up side, the mean average therefore always being higher than the median and thus higher than what the majority earn. Even given this, quite what it has to do with the wealth or not of the US escapes me. 

That means it is in the interest of the majority to vote for politicians promising to redistribute wealth from the top down.

That contention being true only if economies are a zero sum game: only if the amount of income or wealth possible is fixed. As even a cursory glance at historical incomes will show, whether we look 500 years back or 50, this simply isn't true. Thus it would indeed be in the interest of the majority to vote for policies which increased the size of the pie rather than simply reslice it.

It's a quite wonderful example of garbled thinking to my mind, but the real treat comes a little later in the piece. Having implied that the poor were suckered into first the stock market boom and then house buying, both activities which were too risky for them, she then says:

To avoid regulatory scrutiny, the new trend is away from publicly
traded stocks and toward private equity. In November, Nasdaq joined
forces with several private banks, including Goldman Sachs, to form
Portal Alliance, a private-equity stock market open only to investors
with assets upward of $100m. In short order, yesterday's ownership
society has morphed into today's members-only society.

Umm, the Portal Alliance is a market for trading "144a" stocks: those that are deemed too risky to be dealt in by retail investors. The very structure of the market is determined by the Government looking to keep the Mom and Pop investors away from the clutches of the greedy capitalists. And she's complaining?

No, I'm sorry, I simply don't understand. 

View comments

Common Error No. 24

Written by Dr Madsen Pirie | Sunday 03 February 2008

24. "A market economy offers people no more than a crass, materialistic life."

What market economies offer are choices and opportunities. They allow people to acquire the wealth that brings new things within reach. In some cases these will indeed be material things. If a person can become sufficiently well off to afford decent housing, enough to eat, adequate clothing and shoes, these are all better than their absence.

But a market economy brings more. It allows people to buy the things that make life more rewarding. They can enjoy music, communicate more readily with each other, travel to places previously out of reach. These, too, are the result of material things. They do not represent a crass materialism, however, because they give the chance to improve life's social interactions and its mind-broadening opportunities. It might take material objects to enjoy music and to visit exotic places, but a person with access to them does not lead a crass life in consequence.

Even beyond the personal possessions that can add to life's experiences, the wealth created by a market economy enables people to afford better services such as health an education. It enables them to enrich their surroundings with fine architecture. Better education opens doors to life's opportunities, and good health brings the possibility of activities such as sports and hobbies. They require material goods to become possible, but the opportunities they offer are far from materialistic.

Wealth is a tool. It enables the holder to trade it for the things they value. Some might indeed use it to acquire more possessions; it is their choice. For others it might be for enjoyment of the arts, the theatre and the concert hall. Some might seek satisfaction in beautiful objects such as antiques of works of art. The wealth created by economic growth gives access to all of these, and it allows us to express our personality by the choices we make.

View comments

New global health blog

Written by Tom Bowman | Sunday 03 February 2008

cfd.jpgAlthough it is now widely accepted that markets and their underlying institutions are the best way to organise economic relations between people, certain fields of human activity have remained stubbornly resistant to such thinking.

The provision of healthcare, for example, is hindered throughout the world by the belief that governments should take the driving seat. As a result, the patients in developing countries have to endure decrepit state-run healthcare systems, while the UN and its agencies promote all kinds of failing centrally-planned initiatives to combat diseases such as HIV/AIDS and malaria. All this is lavishly funded by taxpayers in richer countries, whose money often doesn’t make it past the personal bank accounts of corrupt officials in ministries of health.

In order to help shift the global health consensus towards something more practical, the Campaign for Fighting Diseases have started a blog – It promises to be well worth reading.

View comments

The economy and the town

Written by Dr Madsen Pirie | Sunday 03 February 2008

There's an interesting point over at the Globalisation Institute. Tim Worstall quotes the fact in the Telegraph that this year for the first time in human history, more of us will live in towns rather than in the country. He rightly points to the abject poverty of rural life in many parts of the world, but quotes the Telegraph article on what urban conditions mean for some.

Shenaz and her husband, Subir, both in their early twenties, made their living sifting household rubbish for metal, squatting on the floor of their shack searching for anything that might be worth a few precious rupees - an iron bed spring, a brass door catch, a few strands of copper wire - anything that had a price with the scrap dealers. Like millions of others, they had come from a village in rural India to scratch a living in the city...

Shenaz and Subir lived on the edge of an open sewer, in a wooden box not much bigger than two large packing cases, actually and metaphorically at the bottom of India's billion-man economic dust-heap. Surely village life was preferable to this, I wondered? Shenaz smiled. "Here we eat every night," she said, "and we even save some money."

That's it in a nutshell. Poor though it is, it's still better than the miserable and precarious lot of many of the world's rural poor. As Tim says,

That peasant life, out in the villages, that hip wading, is even less attractive. Yes, of course, we all want the lives of those slum dwellers to get better: that means more development, more wealth creation, more trade, yes, you've guessed it, more globalisation.

View comments

Quote of the week

Written by Wordsmith | Sunday 03 February 2008

To be governed … is to be watched, inspected, directed, indoctrinated, numbered, estimated, regulated, commanded, controlled, law-driven, preached at, spied upon, censured, checked, valued, enrolled – by creatures who have neither the right, nor the wisdom, nor the virtue to do so.

– Pierre-Joseph Proudhon

View comments


About the Institute

The Adam Smith Institute is the UK’s leading libertarian think tank...

Read more